Issues and implications of involving stakeholders in budgetary planning in a self-financing university providing open and flexible education

Linda Yin-king Lee
The Open University of Hong Kong
Hong Kong SAR, China

As in most tertiary education institutions which provide open and flexible education, the Open University of Hong Kong (OUHK) is a self-financing university. In order to support effective operations and student enrolment — and, most important, to excel in its mission of making higher education available to all through open and flexible education — sound financial budgeting is considered as very significant. Over the past 25 years, the OUHK has successfully tackled the challenges of running a self-financing institution within limited financial resources through well-planned financial budgeting. The budgetary planning mechanism of the University is characterized by having multiple levels and involves multiple stakeholders. The heads of academic units are invited to identify new programmes or the expansion of existing ones, and project student numbers for the coming academic year; and heads of administrative units are required to estimate the expected expenditure for each financial year. The budget is then subjected to approval by a number of committees at different levels, namely the Budget Committee, the Finance Committee and Executive Committee and, finally, the Council. At each level, multiple stakeholders are involved. Involving stakeholders in budgetary planning enhances the budget to be developed with input from diverse perspectives; facilitates the identification of any gap between needs and practice; ensures that the preferences of the ultimate recipients of resources are taken into account; and improves the transparency and accountability of governance. However, the wide involvement of stakeholders may lengthen the decision-making process. To evaluate the outcome, the important indicators of resource usage, including equity, efficiency and effectiveness in achieving educational objectives, are used. Despite the difficulties, the present experience demonstrates that the involvement of stakeholders in the budgetary process facilitates the development of a realistic budget for meeting operational needs and sustaining the growth of the University. Specific suggestions are given for further improvements in the current operation.